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Bedrock for Customer Retention in Hospitality

Homes in Finland

The research designed and aimed to uncover the very low client retention rates of four and five star hotels in the Garden Route area, discovered that of the hotels surveyed only one establishment implemented a structured total quality management (TQM) approach. TQM aims to improve the quality of company’s products and services and steers all operations to this goal along with a very strong focus on customer orientation, a culture of excellence, removal of performance barriers, teamwork, training and employee participation. The empirical results indicated that all hotels agreed that a well-structured TQM system can improve their customer service. Thirty three (33) per cent of hotels did not have a reward and recognition policy in place for best performance, amid the fact that employee contributions in hospitality is one of the most important steps of quality improvement process. In addition, research results should that the majority of hotels (93%) are shifting to performing tasks more efficiently in a cost-effective manner, and respondents agreed that TQM will assist in achieving this goal. Around 96% of hotels indicated strong compliance with critical success factors required for quality improvements, and that they are in fact following TQM principles which accounts for their strong customer focus. However, hotels are not addressing customer service and retention from a structured TQM perspective. In addition, research findings showed that not all hotels gave staff autonomy to make customer service decisions without managerial approval.

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South Africa and the Garden Route

Hotels in Europe

Prof Paul Poisat, professor in Human Resources at NMMU Business School said “based on the strong positive relationship shown between the TQM critical success factors and customer retention, implementing TQM in hotels in the Garden Route and South Africa will not only enhance quality management, but will make a significant contribution to managing customer defections and service recovery, thereby contributing to customer retention, which in turn is linked to the profitability on a sustainable scale for hotels.” He said that the study was a exploratory investigation and could be extended to lower star grading establishments, to international hotels and that findings can be compared to hotels that are MBNQA and EQA certificated. In order to better understand the factors affecting customer retention and guests’ perceptions, future research showing both perspectives of hotels and their guests would give a more accurate picture. “The study also discovers whether or not there is an identifiable profile for customers who defected which may be used for the early discovery of customers at risk. A strong positive relationship was show to exist between the TQM critical success factors and customer retention.” He concludes: “The introduction of TQM at hotels in South Africa and the Garden Route will offer a self sustaining quality management processes that contributes to customer retention”.

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